Need to Know: Betting on the post-pandemic boom? Bank of America has 17 stock recommendations

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Here’s one possible all-clear signal. COVID-19 is no longer a “tail risk” for investors, the first time since February 2020, says Bank of America in its latest fund manager survey. A tail risk is an unlikely event that could cause outsize losses or gains.

Scroll down for that chart.

Meanwhile, the Federal Reserve’s two-day policy meeting begins on Tuesday, and investors will be on the lookout for any hawkish signals that could take some steam out of stocks. The premarket is showing some mixed action after some disappointment over retail sales.

But many remain stuck into the idea of a post-pandemic boom, at least in the U.S. as vaccinations roll out.

Read: Value stocks are making a comeback. Don’t get left behind, these analysts say

That has kept the records coming for the Dow Jones Industrial Average

and S&P 500

and those stocks geared toward a recovery. Our call of the day comes from strategists at Bank of America, who offer up 17 stocks to buy for the three R’s they see coming — recovery, reflation and rerating.

Strategists Jill Carey, Savita Subramanian and Ohsung Kwon say the economy has reached the mid-cycle phase, where inflation typically is strongest. In prior such phases, excluding the technology bubble, small-caps have outperformed larger ones, and value has beaten growth.


The Bank of America team says there are two reasons to like those stocks: many of the companies they highlight are still not expensive, and active funds aren’t positioning for that rising inflation, with heavier exposure to mega than smaller caps.



Onto the stocks (nearly half are small-to-midcap companies)…


— BofA has a share price target $37 for the miner. Aluminum prices could go either way, but global demand growth is a plus for Alcoa.

Axalta Coating Systems

— Share price target £37 for the global coatings group. The pace of automobile recovery will be key and a stronger dollar and lower raw material costs could be a boost.


— Share price target $550. Risks for the semiconductor company include sensitivity to U.S.-China trade relations and competition in networking, smartphone and other markets.


— Share price target $95. Among the energy company’s risks are oil and gas prices, as well as slowing developments in drilling.

Marriott International

— Share price objective $150. Economic weakness and worse-than-expected spending by businesses and consumers are among the risks for the hospitality company.

Walt Disney

— $223 price objective for the entertainment giant that has “best in class assets.” Downside risks include slowing ESPN growth from people deciding not to keep a cable television subscription, weaker consumer confidence, and low theme park attendance. Also watch out for potential film flops.

As for the rest, they like CNH Industrial
Emerson Electric
Herc Holdings
Knight-Swift Transportation
Occidental Petroleum
Parker Hannifin
Principal Financial
Robert Half International
Union Pacific

and World Fuel Services

The chart

Here’s that “tail risk” chart from the latest BofA monthly fund manager survey. Bigger risks are higher-than-expected inflation and a “tantrum” in the bond market.


The markets

The Dow is lower and the S&P 500 is up slightly, with bigger strengthe seen for the Nasdaq Composite
European stocks are higher
and it was an up day for Asian markets. Elsewhere, oil

and the dollar

are weak and bitcoin

has backed further away from the $60,000 level it hit over the weekend.

The buzz

Retail sales dropped a bigger-than-expected 3% in February, though they surged a revised 7.6% in January. Import prices rose 1.3%. That data will be followed by industrial production and a National Association of Home Builders index. Aside from the Fed meeting kickoff, investors will also be watching the outcome of a an auction of 20-year Treasury bonds.

Ray Dalio, the founder of Bridgewater, the world’s biggest hedge fund firm, declares investing in bonds as “stupid” and investors should stick to a “well-diversified portfolio.”



shares are higher after Jefferies upgraded the drug company to buy from hold. AstraZeneca has been in the hot seat as several European countries suspend its COVID-19 shots over reports of blood clots from inoculations.

Finnish telecoms group Nokia


is cutting up to 10,000 jobs to save $716 million over two years.

A team from the U.S. government’s highway safety agency is headed to Detroit to investigate a “violent” crash after a Tesla

vehicle drove under a semitrailer, leaving two people critically injured.

Random reads

Office nostalgia — Redditers swap coworkers-from-hell stories.

When a hacker gets all your texts for $16.

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